Story highlights

To get conservative support, leaders tack on bills aimed at helping create jobs

GOP aides: Plan is a starting point to get feedback from members, parts could change

After competing Republican and Democratic proposals to extend the payroll tax cut failed in the Senate on Thursday night, House Republican leaders assembled their own proposal to extend that tax cut aimed at the middle class and wrap other year-end policy proposals into one bill paid for with a series of spending cuts. But they faced opposition from conservative Republicans.

In addition to a one-year extension of the payroll tax cut, House Speaker John Boehner of Ohio and other top GOP leaders added an extension of unemployment benefits to a legislative package, but tied that assistance to reforms of the program, according to two senior GOP leadership aides. They also added a two-year "doc fix" to the bill that would head off a scheduled cut in physician pay for those treating Medicare patients. Leaders presented the package to their rank-and-file members Friday morning.

To gain support from conservative Republicans who have been reluctant to back any more short-term extensions of these expiring items, leaders tacked on two bills that House Republicans passed this year that they say will help create jobs.

One bill would ease a path for expanding the Keystone pipeline, a controversial energy project proposed to carry oil through an area in Nebraska. Republicans say the Obama administration delayed a decision on the project until at least January 2013 for political reasons, including opposition from environmental groups. The GOP bill would remove the pipeline decision review from the State Department and give it to another federal agency.

The other measure that GOP leaders added was a bill the House approved in October that would direct the Environmental Protection Agency to delay new regulations on industrial boilers and incinerators.

Boehner has insisted that any extensions of tax cuts or other programs be paid for, and he outlined a list of spending cuts over 10 years to offset the impact on the deficit, according to the aides. The chief one would be to extend a salary freeze on federal employees for another two to three years. One senior aide said this was extending "the existing Obama administration policy" and could yield more than $100 billion. The pay freeze would also apply to members of Congress.

But Republican aides stressed that the proposal Boehner outlined was designed as a starting point to get feedback from members and that pieces of the plan could change.

"There will be ongoing discussions with our members on the components of this package," one of the GOP aides said.

A group of fiscally conservative Republicans opposed the GOP leaders' plan to pay for the one-year extension of the payroll tax cut with spending cuts that would be stretched across 10 years.

Rep. Jeff Flake, R-Arizona, said he told Republican leaders directly that he opposed their plan, and he said it was time for Congress to stop more short-term tax extensions. "I think they are wrong. I think that unless we have the courage right now to address entitlement reform, we shouldn't be extending the payroll tax holiday. But we don't have the courage right now to do that."

But other Republicans said that in this economy, any tax increase on Americans would be counterproductive and it was time to reach a deal on the payroll tax cut.

Some Republicans also worried about the political blowback to the GOP if the public sees the party as holding up any middle-class tax relief.

"If we don't extend the payroll tax (cut), we're giving the Democrats an issue. There is no need to give it to them. They're the ones who mismanaged the economy. They are the ones who put us in this situation. We shouldn't allow them to get out from under that," said Rep. Peter King, R-New York.